Global markets today: Indian stock market is likely to open in green on Friday on positive global cues. Asian counterparts are trading higher tracking an upside in the US market overnight. However, positive developments in debt-ceiling negotiations led to higher chances of averting a catastrophic US default which lifted dollar and bond yields. On the contrary, crude oil prices were under pressure.
On the global front, investors take comfort from the optimism of the US is likely to avoid debt default which weighed against sticky inflation that sparked hawkish expectations from the Federal Reserve in the forthcoming policy.
For Friday's trade in domestic equities, Ajit Mishra, VP - of Technical Research, at Religare Broking said, "It is healthy consolidation so far however volatility across sectors is keeping traders on their toes. We feel it’s prudent to stay light and utilize this phase to gradually accumulate quality stocks from top performing sectors viz. banking, financials, FMCG, and auto."
Here are the key factors on the global front which may dictate Indian equities' performance today:
The SGX Nifty traded in the green, hinting at a positive opening in the Indian market. At the time of writing, the SGX Nifty index traded at 18,203 up by 24.5 points or 0.13%. The benchmark opened at 18,180 and is trading in the range of 18,246 and 18,141.5 respectively.
On Indian market, Mitul Shah, Head of Research – Institutional Desk at Reliance Securities said, "The markets are likely to see gap up opening; SGX Nifty is 100 points higher compared to previous spot Nifty closing. Asian Markets are also trading higher, Both Nikkei and Hang Seng are 1.3% higher."
Asian indices traded in the green tracking upside in Wall Street. Japanese shares were the biggest gainers as of now.
After climbing by a little over 1% in Friday's trade, at the time of writing, Japan's Nikkei 225 traded at 30,759.14 up by 185.21 points or 0.61%. Topix index as well inched up to perform at 2,161.77 after rising by at least 0.6% in early trade.
Also, South Korea's KOSPI index traded near the day's high to 2,535.15 up by 0.8%. Australian shares also gained by 0.4% to trade at 7,265.
Wall Street ended on a positive note on Thursday, taking support from expectations of US debt default could be averted along with better-than-expected earnings results of Walmart. Also, the future profitability of artificial intelligence further contributed to the gaining tone.
Dow Jones ended at 33,535.91 up by 115.14 points or 0.34%. S&P 500 index jumped by 39.28 points or 0.94% to end at 4,198.05. Tech-heavy index Nasdaq outperformed its counterparts to close at 12,688.84 up by 188.27 points or 1.51%.
Shah added, US stocks advanced as investors grew more confident that the White House would reach a deal with Congress to avoid a government debt default.
The US dollar index traded steady to reach near a 6-month high against the yen on Friday. Apart from expectations of escape from a US debt default, a hawkish stance from Fed going forward --- also lifted the dollar.
In the early Asian trade, at the time of writing, the dollar performed elevated at around 138.40 yen --- after rising to 138.75 yen which is near a six-month high in the previous session.
Reuters reported that the greenback was eyeing a weekly gain of nearly 2% against the Japanese currency, its largest since February.
Crude oil prices:
International crude oil prices were under pressure with Brent crude futures inching lower to $75.84 a barrel in early trade on Friday. While the US West Texas Intermediate (WTI) dipped by 10 cents to $71.76 per barrel.
Currently, gold prices are moving towards hitting their biggest weekly fall in three-and-half months. In early trade of Friday, spot gold was steady at $1,959.15 per ounce, and US gold futures inched up to $1,961.70 per ounce. Bullion was seen to witness a nearly 3% weekly drop which will be its highest decline since February.
Similar to the dollar, the US treasury yield climbed on expectations of a hawkish Fed policy which boosted the sentiment in this instrument. The benchmark 10-year notes were at 3.6476 --- to record nearly 20 bps upside so far this week. Meanwhile, the 2-year yield edged up to 4.2581%.
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